The American currency shows stability, despite another exacerbation of the trade war with China. We can’t say the same about GBP. The prospects for the British pound do not look very optimistic. Today, for the British currency is expected to be quite a busy day in the economic calendar. The data on CBI industrial trends for May will be released in the second half of the day.
While the projected figures are quite optimistic, the hearings on the Bank of England’s inflation report, which will take place at the beginning of the day, are likely to overshadow the figures of this indicator. Intrigues of the foreign exchange market can add yesterday's decline in the main stock indexes in Europe and the UK.
The head of the Bank of England Carney recently said that markets do not reflect a more aggressive rate of interest rates. The expected increase in inflationary pressure is one of Carney’s problems. Today’s meeting may raise prospects for a short-term rate hike if the Bank of England sees a rise in inflationary pressure.
However, geopolitical risk will remain a major factor. The Brexit deal with the EU, Nigel Farage as the leader of the race for the premiership and the general return of angry supporters of Britain’s exit from the Euro block to the political scene will remain key factors of pressure on the GBP in the near future.
On the eve, the US dollar slightly changed against the backdrop of a new round of trade war with Beijing, after Washington practically banned trade with the Chinese company Huawei.
Yesterday, it also became known that Google and a number of other US companies completely cease business with the Chinese Huawei. This news led to a decline in quotations on Wall Street, as well as increased uncertainty of investors in general. Leading stock indexes in Europe also closed on the eve in the red. Nevertheless, the dollar manages to keep quite stable positions on Forex.
Forex trading recommendations:
GBPUSD: Sell. Entry point – 1, 2712. Take Profit – 1, 2700. Stop Loss – 1, 2723.
USDCAD: Buy. Entry point – 1, 3427. Take Profit – 1, 3444. Stop Loss – 1, 3398.
AUDUSD: Sell. Entry point – 0, 6886. Take Profit – 0, 6869. Stop Loss – 0, 6916.
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